How to attract customers to buy green housing?:  Their heterogeneous willingness to pay for different attributes

Chenchen He; Shiwei Yu; Qi Han; Bauke de Vries

doi:10.1016/j.jclepro.2019.05.160

How to attract customers to buy green housing? Their heterogeneous willingness to pay for different attributes

Chenchen He, Shiwei Yu (Corresponding author), Qi Han, Bauke de Vries

Research output: Contribution to journal › Article › Academic › peer-review

41 Citations (Scopus)

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Abstract

To promote the green housing (GH) diffusion, the paper analyzes the customers’ willingness to pay (WTP) for GH. Especially, it divides them into clusters by two-step cluster to understand the heterogeneity in WTP. Moreover, instead of concentrating on the whole GH, it calculates the WTP for different attributes of GH by discrete choice model. 313 respondents are involved and divided into three clusters. And then, their heterogeneous WTP for attributes are calculated. It finds that: (i) The customers could be classified according to their socio-demographic and knowledge of GH, whereas the environmental concern could not be used to divide them; (ii) In general, the most attractive attributes are accessibility within 400 m to the service facilities and the comfortable indoor air quality, which could earn extra 381.63 and 375.5 RMB/m² respectively; (iii) Recently, people in the upper-middle class are the target customers for GH, since they are attracted by most of the green-related attributes and have the largest WTP(1233.60 RMB/m²). They most want to pay for indoor air quality and higher green space ratio. People in the middle class are the potential customers for GH, while the lower-middle class does not prefer to GH. Accordingly, it further proposes suggestions for developers and government in terms of which cluster is the target group and what attributes are the most important to different customers.

Original language	English
Pages (from-to)	709-719
Number of pages	11
Journal	Journal of Cleaner Production
Volume	230
DOIs	https://doi.org/10.1016/j.jclepro.2019.05.160
Publication status	Published - 1 Sept 2019

Funding

Financial supports from the National Natural Science Foundation of China (Grant Nos. 71573236 and 71822403 ). Appendix Table A1 A choice set example Table A1 Attribute Housing A Housing B None Green space ratio (%) 45 45 Designed energy saving ratio(%) 65 80 Designed water saving ratio (%) 20 20 Indoor air quality Unacceptable but without causing major health threats Comfortable Thermal comfort Acceptable but sometimes a little cold or warm Unacceptable but without causing major health threats Total floor area (m 2 ) <90 90–140 Estate management excellent excellent Familiar with neighbors Have some family members and friends around Have some family members and friends around The accessibility to service facilities(m) 800 1200 Extra price per area(RMB/m 2 ) 500 1500 Your choice

Keywords

Customer clusters
Developing strategy
Discrete choice model
Green housing
Stimulating policy
Willingness to pay

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.1016/j.jclepro.2019.05.160

Cite this

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title = "How to attract customers to buy green housing?: Their heterogeneous willingness to pay for different attributes",

abstract = "To promote the green housing (GH) diffusion, the paper analyzes the customers{\textquoteright} willingness to pay (WTP) for GH. Especially, it divides them into clusters by two-step cluster to understand the heterogeneity in WTP. Moreover, instead of concentrating on the whole GH, it calculates the WTP for different attributes of GH by discrete choice model. 313 respondents are involved and divided into three clusters. And then, their heterogeneous WTP for attributes are calculated. It finds that: (i) The customers could be classified according to their socio-demographic and knowledge of GH, whereas the environmental concern could not be used to divide them; (ii) In general, the most attractive attributes are accessibility within 400 m to the service facilities and the comfortable indoor air quality, which could earn extra 381.63 and 375.5 RMB/m2 respectively; (iii) Recently, people in the upper-middle class are the target customers for GH, since they are attracted by most of the green-related attributes and have the largest WTP(1233.60 RMB/m2). They most want to pay for indoor air quality and higher green space ratio. People in the middle class are the potential customers for GH, while the lower-middle class does not prefer to GH. Accordingly, it further proposes suggestions for developers and government in terms of which cluster is the target group and what attributes are the most important to different customers.",

keywords = "Customer clusters, Developing strategy, Discrete choice model, Green housing, Stimulating policy, Willingness to pay",

author = "Chenchen He and Shiwei Yu and Qi Han and {de Vries}, Bauke",

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T2 - Their heterogeneous willingness to pay for different attributes

AU - He, Chenchen

AU - Yu, Shiwei

AU - Han, Qi

AU - de Vries, Bauke

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AB - To promote the green housing (GH) diffusion, the paper analyzes the customers’ willingness to pay (WTP) for GH. Especially, it divides them into clusters by two-step cluster to understand the heterogeneity in WTP. Moreover, instead of concentrating on the whole GH, it calculates the WTP for different attributes of GH by discrete choice model. 313 respondents are involved and divided into three clusters. And then, their heterogeneous WTP for attributes are calculated. It finds that: (i) The customers could be classified according to their socio-demographic and knowledge of GH, whereas the environmental concern could not be used to divide them; (ii) In general, the most attractive attributes are accessibility within 400 m to the service facilities and the comfortable indoor air quality, which could earn extra 381.63 and 375.5 RMB/m2 respectively; (iii) Recently, people in the upper-middle class are the target customers for GH, since they are attracted by most of the green-related attributes and have the largest WTP(1233.60 RMB/m2). They most want to pay for indoor air quality and higher green space ratio. People in the middle class are the potential customers for GH, while the lower-middle class does not prefer to GH. Accordingly, it further proposes suggestions for developers and government in terms of which cluster is the target group and what attributes are the most important to different customers.

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